“The data center equipment market was down sequentially, but it is up nicely from the year-ago first quarter,” says Sam Barnett, directing analyst for data center and cloud at Infonetics Research. “For the remainder of 2012 and into 2013, we expect growth to be choppy as service providers and data center operators are at different stages in their data center upgrades and some are beginning to wind down their current investment cycle.”
The report states that global revenue for data center network equipment—data center Ethernet switches, application delivery controllers, and WAN optimization appliances— fell to $2.2 billion in 1Q12, down 6% from 4Q11, but up a strong 17% over last year. The report notes that WAN optimization appliances saw the steepest revenue decline, down 20% from the previous quarter.
Globally, the report notes that the Asia Pacific region posted the strongest sequential gain in 1Q12 for overall data center network equipment revenue, while North America still accounts for nearly half the market. Because renewed fears of an economic meltdown in the EU community are pressuring investments, the EMEA (Europe, Middle East, and Africa) region was down 10% quarter over quarter, and had the worst year-over-year of all regions.